Group Five, one of the largest contractors in South Africa, has seen its stock suspended on the Johannesburg Stock Exchange after the company filed for bankruptcy protection.
The contractor is said to have been in financial difficulties for some time due to operating losses and negative cash flows.
Group Five’s 12-month results through to 30 June 2018, saw revenue decrease 26.2% from ZAR 9.9 billion (US$690 million) to ZAR 7.3 billion (US$509 million). The operating loss was ZAR 1.3 billion (US$91 million).
The South African economy only grew 0.8% in 2018 – the economy has not expanded by more than 2% a year since 2013. The official unemployment rate is currently 27%.
The construction industry in South Africa has struggled since the upsurge brought on by preparations for the 2010 FIFA World Cup. The South African builder, Basil Read, filed for bankruptcy protection last year, and in 2016 Murray & Roberts pulled out of construction.